Pak Pacific Corporation Pty Ltd v Palmer

[2006] NSWWCCPD 90

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Pak Pacific Corporation Pty Ltd v Palmer [2006] NSWWCCPD 90

APPELLANT:  Pak Pacific Corporation Pty Ltd

RESPONDENT:  Lawrence Palmer

INSURER:American Home Assurance Company

FILE NUMBER:  WCC 18560-03

DATE OF ARBITRATOR’S DECISION:          11 February 2005

DATE OF APPEAL DECISION:  18 May 2006

SUBJECT MATTER OF DECISION:                Treatment of the evidence; application of section 11(1) of the Workers Compensation Act 1926

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Lee & Lyons, Lawyers

Respondent: Lamrocks, Solicitors

ORDERS MADE ON APPEAL:  The decision of the Arbitrator is confirmed.

The Appellant, Pak Pacific Corporation Pty Ltd, is to pay the costs of the Respondent, Mr Palmer, in this appeal.

BACKGROUND TO THE APPEAL

1. On 17 March 2005, Pak Pacific Corporation Pty Ltd (‘Pak Pacific’) sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 11 February 2005. Pak Pacific’s workers compensation insurer is American Home Assurance Company (‘the insurer’).

1. The Respondent to the appeal is Lawrence Palmer. Mr Palmer was born on 19 July 1929 and is aged 76. He commenced working for Pak Pacific as a lithographic printer in January 1951, rising, over the course of time, to the position of factory manager. On 16 December 1983, when crossing a road in the course of his employment, Mr Palmer was hit by a motorcycle, suffering injuries to his left shoulder and both legs. He claimed workers compensation and was paid weekly compensation during a period of four and a half months when he was “off work”. Mr Palmer returned to work after this time and continued to work for Pak Pacific until he retired in February 1990 at the age of 61. After this, he undertook some consultancy work in the printing industry for about two years but stopped this due to his inability to stand for lengthy periods. Since then, Mr Palmer has undertaken clerical work for a few days a month. Mr Palmer underwent surgery for a left hip replacement on 13 March 2003.

1. On 14 August 2002, Mr Palmer made a further claim for weekly compensation and medical expenses and, on 5 November 2002, he claimed compensation for permanent impairment and pain and suffering. On 18 November 2002, the insurer denied liability. On 27 November 2003, Mr Palmer lodged an ‘Application to Resolve a Dispute’ with the Commission in respects of his claims for weekly compensation, medical, hospital or related expenses, and compensation for permanent impairment. He was referred to an Approved Medical Specialist (‘AMS’), Dr Frederick Blake, whose Medical Assessment Certificate (‘MAC’) was issued on 2 September 2004. Dr Blake assessed Mr Palmer as having a 40% permanent loss of efficient use of both legs at or above the knee. The parties subsequently agreed that Pak Pacific would pay Mr Palmer compensation of $8,800 for each leg in respect of a 40% permanent loss of efficient use of each leg at or above the knee, pursuant to section 16 of the Workers Compensation Act 1926 (‘the 1926 Act’).

1. On 21 January 2005, the Arbitrator conducted a conciliation conference with the parties and, subsequently, an arbitration hearing. While Pak Pacific consented to pay Mr Palmer’s outstanding medical and related expenses of $30,978.30, there was no agreement in relation to his claim for weekly compensation. The Arbitrator therefore heard oral submissions from the parties in respect of the outstanding claim and, it having been agreed that he would make his decision on the basis of the documentary evidence, on 11 February 2005, he made a decision ‘on the papers’ in the terms set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 11 February 2005, records the Arbitrator’s orders as follows:

“1. On 16^th December 1983 Lawrence Palmer received injuries to his left shoulder and both legs arising out of or in the course of his employment with Pak Pacific Corporation Pty Limited.
2. Lawrence Palmer has remained partially incapacitated for work as a result of those injuries from 4 October 2002 onwards.
3. The Respondent pay the Applicant weekly compensation as follows:

$312.90 per week from 4 October 2002 to 31 March 2003.

$318.30 per week from 1 April 2003 to 30 September 2003.

$324.70 per week from 1 October 2003 to 31 March 2004.

$330.60 per week from 1 April 2004 to 30 September 2004.

$336.70 per week from 1 October 2004 to date and thereafter at the maximum statutory rate applicable as adjusted.

4. Respondent to pay the Applicant’s costs as agreed or assessed.”

1. In the Statement of Reasons for his decision, the Arbitrator noted that Pak Pacific had conceded that “all the medical evidence including the MAC makes it clear that the Applicant is suffering an ongoing incapacity for work”. Thus, the only issue to be determined was the amount of weekly compensation to which Mr Palmer was entitled and during what period(s). Mr Palmer’s claim was made pursuant to section 11(1)(a) of the 1926 Act which stated:

“In the case of partial incapacity, the weekly payment shall in no case exceed the difference between the weekly amount which the worker would probably have been earning as a worker but for the injury and had he continued to be employed in the same or some comparable employment, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury, but shall bear such relation to the amount of that difference as under the circumstances of the case may appear proper.”

1. The Arbitrator referred to the three stage process for making an assessment under section 11(1) prescribed by the NSW Court of Appeal in Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 (‘Nicholson’). He noted that while age is no bar to such a claim, this was a matter to be considered in relation to the third stage in the assessment process when determining Mr Palmer’s “proper” entitlement. With regard to the first stage, the Arbitrator found that in the last 32 weeks of his full-time employment, Mr Palmer had averaged $1,176.92 gross per week, which, according to Mr Palmer’s solicitor, would with CPI adjustments equate to a current gross figure of $1,669.93 per week. On the basis of Mr Palmer’s evidence that, after his retirement, he had hoped to work two to three days per week as a consultant in the printing industry, the Arbitrator found that, were it not for his injuries, Mr Palmer would be earning approximately $668 gross for working two days a week as a consultant, based on the current applicable rate were he still employed by Pak Pacific as a factory manager.

1. With regard to stage two, the Arbitrator found Mr Palmer was currently earning an average of $173 gross per week. Having regard to the limitations on Mr Palmer’s mobility set out by Dr Blake in the MAC, the Arbitrator found Mr Palmer was only fit for light clerical work and, at best, he could be expected to work only one day full-time per week earning $250 gross. The differential between $668 and $250 of $418 exceeded the maximum statutory rate for a worker with a dependent spouse, were that to be applicable.

1. With regard to stage three, and what appears “proper” in the circumstances, the Arbitrator found that Mr Palmer had demonstrated that “he remains a man who likes to work”. Also taking into account Mr Palmer’s history of 39 years uninterrupted employment with Pak Pacific, the Arbitrator said he could see “no need to exercise my discretion to reduce this Applicant’s entitlement to weekly payments below the statutory rate applicable under the 1926 legislation which rate even now only allows the maximum of $336.70 gross per week”.

ISSUES IN DISPUTE

1. Pak Pacific submits the Arbitrator made various errors of law in determining Mr Palmer’s entitlement to weekly compensation and in failing to give adequate reasons for his decision. The parties’ submissions on these issues are discussed more fully below. 

ON THE PAPERS REVIEW

1. Section 354(6) of Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties. Pak Pacific submits the parties should be allowed to make additional oral submissions on the matters in dispute including the basis on which the entitlements under section 11(1) of the 1926 Act were calculated. Mr Palmer’s solicitors submit the matter can be decided solely on the basis of the papers. Having considered these submissions and the relevant documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. Section 352(4) states that “[a]n appeal can only be made within 28 days after the making of the decision appealed against.” Rule 77(1) of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides that a decision is made when the Commission issues the Certificate of Determination.

1. In this case, the decision was made on 11 February 2005, when the Certificate of Determination was issued. The appeal therefore had to be lodged by 11 March 2005 - within 28 days after the date of the decision. Pak Pacific’s application was first received by the Commission on 11 March 2005 – within 28 days. However, by letter dated 15 March 2005, a delegate of the Registrar of the Commission rejected Pak Pacific’s application for failure to attach submissions as to why the proposed new evidence was not given in proceedings before the Arbitrator and as to why it should be admitted, and for failure to attach a copy of the new evidence. Pak Pacific responded by making a new application, received on 17 March 2005, which did not seek to rely on new evidence.

1. Rule 77(8) provides that a Presidential Member may extend the time for making an appeal where the Appellant demonstrates that exceptional circumstances exist, and that they would suffer a substantial injustice if the right of appeal were lost. The onus of proving exceptional circumstances rests with the Appellant.

1. The Rules do not set out the factors to be considered in the exercise of the discretion to extend the time for filing an appeal against the decision of an Arbitrator. However, this issue has often been the subject of judicial consideration. A leading case is Gallo v Dawson (1990) 93 ALR 479, where Justice McHugh set out a number of guiding principles. He emphasised that the discretion to extend time should only be exercised where strict compliance with the rules will lead to an injustice for the applicant. In so deciding, regard should be had to (i) the history of the proceedings, (ii) the conduct of the parties, (iii) the nature of the litigation, (iv) the consequences for the parties of the grant or refusal of the application for extension of time, (v) the prospects of the applicant succeeding if leave is granted, and (vi) the respondent’s right, after the expiry of the time for appealing, to rely upon the decision made. These principles have been applied in Commission proceedings: see, for example, Howell v Stringvale Pty Ltd [2004] NSW WCC PD 22, and Alexandru v State Rail Authority of NSW [2004] NSW WCC PD 54.

1. Pak Pacific submits that the new application is substantially the same as the original application except for the deletion of the reference to the proposed new evidence. It states that no fresh matters are raised and submits that the injustice to it would be substantial if an extension of time is not granted. Mr Palmer’s solicitors are silent on this issue.

1. In this case, the original application was lodged within time and Pak Pacific was unable to respond to the letter of rejection within time, but did so swiftly thereafter. While conformity with the Commission’s procedural requirements is important, these are not matters of substance. Here the extension of time sought – six days - is minimal in comparison to the prejudice that would be suffered by Pak Pacific and the denial of procedural fairness that would ensue if an extension of time were not granted. On the other hand, there would be no prejudice to Mr Palmer by the granting of an extension of time, and no additional costs are involved since my review is one on the papers. While, in my view, the prospects of Pak Pacific succeeding in its appeal are not great, that, in my view, is outweighed by the other factors favouring the granting of an extension of time. I therefore grant an extension of time for the filing of Pak Pacific’s application until 17 March 2005.

1. With regard to section 352(2), I accept Pak Pacific’s submission that the amount of weekly compensation at issue exceeds $5,000 and constitutes 100% of the amount of weekly compensation awarded by the Arbitrator, that ultimately being the only substantive matter in dispute before the Arbitrator.

SUBMISSIONS

1. Pak Pacific does not dispute that Mr Palmer received injuries to his shoulder and legs arising out of or in the course of his employment. It notes that Mr Palmer provided no information about whether in 1990 he was offered a redundancy package, nor as to the nature of his consultancy work in the two years following his retirement, in particular as to the hours worked, his earnings and the physical requirements of that work. Pak Pacific contends there was also insufficient information about the clerical work he undertook subsequently and his earning capacity and physical capability after recovering from the hip surgery. It also notes there was no medical evidence as to the history of symptoms and treatment between February 1984 and February 2002.

1. Pak Pacific submits, first, that the Arbitrator failed to properly determine the rates and period of the award of weekly compensation in accordance with the steps in Nicholson. Secondly, it submits the Arbitrator failed to properly determine Mr Palmer’s current ability to earn in some suitable employment, wrongly accepting his current average weekly earnings as evidence of this without considering whether Mr Palmer was restricted from performing clerical work by his physical limitations connected with the injury. Thirdly, the Arbitrator failed to exercise his statutory discretion to reduce the differential between Mr Palmer’s probable earnings had he not been injured and had he continued to work in the same or some comparable employment, and the average weekly amount he is earning or able to earn in some suitable employment or business after the injury, taking into account evidence of his retirement in 1990, osteoarthritis unrelated to the injury and his employment history between his retirement and the onset of partial incapacity resulting from the injury on 4 October 2002.

1. With regard to the evidence, Mr Palmer’s solicitors note that Pak Pacific’s ‘Reply’ did not put in issue Mr Palmer’s claim for a dependent spouse. Pak Pacific did not file any medical evidence, did not seek an opportunity to cross-examine Mr Palmer, and agreed that the Arbitrator could make a decision on the documentary evidence before him without the need for further oral evidence. Mr Palmer’s solicitors contend that in its oral submissions to the Arbitrator, Pak Pacific conceded that Mr Palmer has a dependent spouse and an ongoing partial incapacity for work.

1. With regard to Pak Pacific’s submissions on the evidence, Mr Palmer’s solicitors note that Pak Pacific filed no response to the Wages Schedule filed by Mr Palmer. Moreover, Pak Pacific did not seek to cross-examine Mr Palmer on his statement dated 27 June 2004 and filed no evidence in response. The Arbitrator accepted Mr Palmer’s evidence that his main problem now is the pain in his right leg, which is causing him difficulty in getting to work on the one day a week that he works. With regard to Mr Palmer’s earnings, in the absence of comparable evidence of earnings at present, the Arbitrator was entitled to make an assessment of probable earnings based on earnings in the printing industry in 1990. With regard to Mr Palmer’s current earning capacity, there was no evidence before the Arbitrator to lead him to believe that evidence of Mr Palmer’s actual earnings could not be relied on as evidence of his ability to earn after the injury.

1. With regard to the first of the alleged errors of law Pak Pacific contends were made by the Arbitrator, Mr Palmer’s solicitors submit the Arbitrator’s findings were in accordance with the steps prescribed by the Court of Appeal in Nicholson. They contend that Mr Palmer’s statement sets out his current earnings and this statement was not contested by Pak Pacific, who did not seek to cross-examine Mr Palmer on any aspect of the evidence before the Arbitrator. The Arbitrator’s findings on the restrictions on Mr Palmer’s mobility are supported by the evidence, as is the Arbitrator’s finding that Mr Palmer is only fit for clerical work on one day per week.

1. Mr Palmer’s solicitors submit the Arbitrator properly exercised his statutory discretion at the third stage of the process prescribed in Nicholson. There was no evidence before the Arbitrator to suggest that the osteoarthritis aggravated by the injury would, had it not been aggravated, have affected Mr Palmer’s capacity for work. The history of the treatment of Mr Palmer’s condition is set out in evidence of Dr Neil Berry, Surgeon, in his report dated 4 October 2002, and in the MAC issued by the AMS, Dr Blake. With regard to Pak Pacific’s submission concerning the lack of contemporaneous medical evidence for the period from February 1984 to February 2002, Mr Palmer’s solicitors point out that the claim for weekly compensation was in respect of the period from 4 October 2002, although there is no basis for suggesting that this was the onset of the partial incapacity.

DISCUSSION AND FINDINGS

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, the Appellant must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. Where the weight accorded to the evidence by the Arbitrator is challenged, Deputy President Fleming’s comment in Knight v Eyles Nominees Pty Ltd [2004] NSW WCC PD 73, at paragraph 40, should be borne in mind:

“Interference with an Arbitrator’s discretionary judgement as to the weight of evidence should only be done where it is manifestly obvious that the discretion has so miscarried that it has not been exercised fairly and lawfully.”

1. There is no transcript of the oral submissions made by the parties to the Arbitrator at the arbitration hearing. I am therefore reliant on the documentary material in conducting this review. I should note at the outset that it is surprising that Pak Pacific should now make extensive submissions about the evidence and Arbitrator’s treatment of the evidence when it appears that Pak Pacific filed no medical evidence, no evidence in relation to comparable wages and no evidence in response to Mr Palmer’s first undated statement and later statement dated 27 June 2004. Moreover, Pak Pacific did not seek to cross-examine Mr Palmer on his evidence.

1. Pak Pacific complains about the lack of evidence filed by Mr Palmer in relation to the period 1990 to 2002.  Mr Palmer’s statement dated 27 June 2004 deals briefly with this period and it would have been open to Pak Pacific to cross-examine him about it. Mr Palmer describes both the work he had hoped to undertake following his retirement and the work he undertook during this time that was affected by the physical problems he was experiencing. As a consequence, at the time of his second statement, he was working an average of one day a week doing clerical work in the printing industry. Mr Palmer’s solicitors filed his Group Certificate for the period 17 January 1989 to 16 February 1990 and a Wages Schedule in respect of the period from 4 October 2002. They filed a medical report dated 9 September 2003 from Dr Warwick Bruce, Mr Palmer’s treating Orthopaedic Surgeon in relation to his left hip replacement, and a report from Dr Neil Berry, Surgeon, dated 4 October 2004, as well as a short report dated 9 February 1984 from Mr Palmer’s treating Orthopaedic Surgeon following the accident, Dr William Lennon. Pak Pacific submits there was insufficient evidence before the Arbitrator to support his findings. I am not satisfied that this is so but I will consider the issue in relation to the three steps prescribed by the NSW Court of Appeal in Nicholson for an assessment under section 11(1) of the 1926 Act.

1. The first stage requires a determination of the applicant’s probable weekly earnings but for the injury had he continued to be employed in the same or some comparable employment. The Arbitrator made an estimate based on Mr Palmer’s earnings in the last 32 weeks of his employment before his retirement. In the absence of other information, in my view it was reasonable for the Arbitrator to proceed on this basis, especially given that any figure arrived at pursuant to stage three would be subject to the statutory maximum for a worker with a dependent spouse. With no reduction pursuant to stage three, the Arbitrator’s finding that Mr Palmer would have been able to earn $668 gross for a two day week, was still double the applicable maximum statutory rate and, thus, it was not as important as it might otherwise have been for the Arbitrator to arrive at a very precise figure. In my view, in the circumstances, it was reasonable for the Arbitrator to make an estimate for the purposes of stage one on the basis of the evidence available to him. I therefore reject Pak Pacific’s submission that the Arbitrator made an error in so doing.

1. Stage two requires a determination of the average weekly amount the worker is earning or able to earn in some suitable employment or business after the injury. The Arbitrator considered evidence of Mr Palmer’s current earnings, took into account that the limitations on his mobility arising from the injury affect his ability to earn, and determined that he could be expected to earn $250 per week in suitable employment. In my view, it was reasonable for the Arbitrator to so conclude on the basis of the evidence before him and in the absence of any evidence to indicate that this evidence could not be relied upon. The Arbitrator then calculated the differential between this figure and the $668 determined at stage one as being $418 per week.

1. Stage three requires the Arbitrator to exercise his discretion in determining such amount of weekly compensation as may appear proper in the circumstances of the case. The Arbitrator noted that the award would be subject to the statutory maximum for a worker with dependent spouse. Mr Palmer’s claim in respect of his dependent wife does not appear to have been in issue before the Arbitrator. His solicitors state Pak Pacific conceded that Mr Palmer has a dependent spouse in its oral submissions to the Arbitrator. The Arbitrator decided not to exercise his discretion to reduce the amount calculated at stage two after considering Mr Palmer’s employment history and, in particular, his dedication to work. I do not accept, as contended by Pak Pacific, that the Arbitrator failed to have regard to the medical evidence. He noted the medical evidence and attribution of permanent impairment to the injury, and that Pak Pacific had conceded that Mr Palmer had a partial incapacity for work. Thus, I am not satisfied that there is any basis on which I should interfere with the exercise of the Arbitrator’s discretion.

1. Finally, as to the adequacy of the Arbitrator’s reasons, in my view, the Arbitrator fulfilled his obligation under section 294(2) of the 1998 Act and Rule 73 of the Workers Compensation Commission Rules 2003 to provide adequate reasons for his decision. Moreover, there is nothing to indicate that the Arbitrator failed to exercise his duty “to fairly and lawfully determine the application” (Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6, at paragraph 48).

1. In conclusion, I am not satisfied that Pak Pacific have made out any of their grounds of appeal and the Arbitrator’s decision must therefore be confirmed.

DECISION

1. The decision of the Arbitrator is confirmed.

COSTS

1. The Appellant, Pak Pacific Corporation Pty Ltd, is to pay the costs of the Respondent, Mr Palmer, in this appeal.

Robin Handley

Acting Deputy President  18 May 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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